Neutral NTPC; target of Rs 360: Motilal Oswal

Moneycontrol • 1 day ago

Original source

Key Investment Pillars

  • Strong Coal PLF: NTPC's coal-based power plants reported a strong plant load factor (PLF) of 75.11% in 1HFY27, significantly ahead of the all-India average of 68.35%.
  • Renewable Energy Ambitions: The company is scaling up its renewable energy capacity, with a target of 5GWh of battery energy storage system (BESS) at thermal power stations, and NGEL has a broader ~40GWh storage pipeline.
  • Capacity Addition: NTPC has a strong pipeline of capacity additions, with 37GW of capacity under construction, including 17GW of thermal, 3.6GW of hydro, and ~16GW of renewables.
  • Financial Performance: The company's financial performance has been strong, with consolidated revenue growing 21% YoY and EBITDA growing 22% YoY in 1HFY27.

Thesis Validation Checklist

To validate the Neutral rating and target price of INR360, investors should watch for the following signals over the next 12 months:

  • NGEL's commissioning pace: The pace of NGEL's commissioning of new renewable energy capacity will be a key monitorable.
  • Renewable energy growth: The growth of NTPC's renewable energy capacity and its ability to achieve its targets will be crucial.
  • Coal PLF: The company's ability to maintain a strong coal PLF will be important for its financial performance.
  • Financial performance: The company's ability to maintain its strong financial performance, including revenue and EBITDA growth, will be key to achieving the target price.